[Federal Register Volume 81, Number 149 (Wednesday, August 3, 2016)]
[Rules and Regulations]
[Pages 51116-51120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18381]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 424, and 455

[CMS-6073-N]


Medicare, Medicaid, and Children's Health Insurance Programs: 
Announcement of the Provider Enrollment Moratoria Access Waiver 
Demonstration of Part B Non-Emergency Ground Ambulance Suppliers and 
Home Health Agencies in Moratoria-Designated Geographic Locations

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Implementation of the waiver demonstration.

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SUMMARY: This notice announces the Provider Enrollment Moratoria Access 
Waiver Demonstration of Part B Non-Emergency Ground Ambulance Suppliers 
and Home Health Agencies in 6 states. The demonstration is being 
implemented in accordance with section 402 of the Social Security 
Amendments of 1967 and gives CMS the authority to grant waivers to the 
statewide enrollment moratoria on a case-by-case basis in response to 
access to care issues, and to subject providers and suppliers enrolling 
via such waivers to heightened screening, oversight, and 
investigations.

DATES: Effective July 29, 2016.

FOR FURTHER INFORMATION CONTACT: Jung Kim, (410) 786-9370. News media 
representatives must contact CMS' Public Affairs Office at (202) 690-
6145 or email them at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The Affordable Care Act provided CMS with new tools and resources 
to combat fraud, waste, and abuse in Medicare, Medicaid, and the 
Children's Health Insurance Program (CHIP), including the authority to 
implement a temporary moratorium on provider enrollment in these 
programs. CMS uses quantitative and qualitative data to determine 
whether there is a need for a moratorium, such as reviewing provider 
and supplier saturation data for the area

[[Page 51117]]

under consideration for a moratorium and whether such area has 
significantly higher than average billing per beneficiary or provider 
per beneficiary ratios. CMS first used its moratoria authority on July 
30, 2013, to prevent enrollment of new home health agencies (HHAs) in 
the Chicago, Illinois and Miami, Florida areas, as well as Part B 
ground ambulance suppliers in the Houston, Texas area. CMS exercised 
this authority again on January 30, 2014, to extend the existing 
moratoria and expand them to include HHAs in the metropolitan areas of 
Fort Lauderdale, Florida; Detroit, Michigan; Houston, Texas; and 
Dallas, Texas, as well as Part B ground ambulance suppliers in 
Philadelphia, Pennsylvania and nearby New Jersey counties. The 
moratoria have since been extended at 6-month intervals and to date, 
remain in place in all of the locations previously noted.
    Since implementation of the moratoria, CMS has been able to 
evaluate the moratoria and has identified several limitations. Because 
the current moratoria are geographically defined by county, they do not 
prohibit providers and suppliers from opening new locations or creating 
a new enrollment outside the moratorium area and moving it into a 
moratorium area. Moreover, CMS is unable to prevent existing providers 
and suppliers from outside of a moratoria area from servicing 
beneficiaries within that area. In fact, CMS has analyzed data showing 
that some providers and suppliers who are located several hundred miles 
outside of a moratorium area are billing for services provided to 
beneficiaries located within that moratorium area. The ability of 
providers and suppliers to circumvent the moratoria undermines the 
effectiveness of the moratoria in protecting the integrity of the 
Medicare, Medicaid, and CHIP programs.
    In order to mitigate the vulnerabilities that have been observed in 
the current moratoria, CMS is expanding the moratoria on Medicare Part 
B, Medicaid, and CHIP non-emergency ambulance suppliers and Medicare, 
Medicaid, and CHIP HHA providers to statewide as announced elsewhere in 
this issue of the Federal Register.

II. Demonstration Design and Duration

    CMS is implementing the ``Provider Enrollment Moratoria Access 
Waiver Demonstration'' (PEWD), as authorized by section 402(a)(1)(J) of 
the Social Security Amendments of 1967 (42 U.S.C. 1395b-1(a)(1)(J)), 
concurrently with the announcement of the statewide expansion of 
temporary moratoria on the enrollment of non-emergency ambulance 
suppliers and home health agencies in Medicare, Medicaid, and CHIP in 
six states elsewhere in this issue of the Federal Register. CMS is 
implementing this statewide expansion in order to address a high 
incidence of fraud in the moratoria areas without adversely affecting 
beneficiary access to care. This demonstration will permit a provider 
or supplier subject to the moratoria to submit a PEWD application that, 
if approved, will exempt the provider or supplier from the statewide 
moratorium in designated geographic areas. Additionally, it will 
implement a process for heightened review and investigations for such 
providers and suppliers enrolling pursuant to such waivers.
    In order to qualify for a waiver of the moratoria restrictions, a 
provider or supplier must demonstrate that an access to care issue 
exists, and will be subject to heightened screening measures. If the 
provider or supplier receives a waiver, restrictions will be 
implemented on the provider's or supplier's service area to limit the 
provider or supplier to the area with access to care issues and prevent 
it from furnishing services in locations that are already oversaturated 
with that provider or supplier type. This restriction will be based on 
the saturation of providers or suppliers and the number of 
beneficiaries in the counties where the provider or supplier proposes 
to operate. Extensive evaluations of providers and suppliers seeking to 
enroll through this demonstration will be coupled with proactive 
reviews of submitted claims beginning within the first 60 days of 
enrollment, as well as increased investigations with referral to law 
enforcement as appropriate, for newly enrolled and existing providers.
    Under the demonstration, claims submitted for services furnished 
outside of the provider's or supplier's approved service area will be 
denied and the provider or supplier may not bill beneficiaries for such 
services provided. This will limit the financial liability of Medicare, 
Medicaid, and CHIP beneficiaries and protect them from costs associated 
with claims submitted by providers and suppliers who are not eligible 
to provide services in that geographic location.
    For the same reasons that we implementing this demonstration in 
Medicare, CMS will also implement the demonstration in Medicaid and 
CHIP, as authorized by section 402 of the Social Security Amendments of 
1967.

A. Medicare Implementation

    The CMS Center for Program Integrity (CPI) will perform all PEWD 
application reviews and make the relevant access to care 
determinations.
    CMS is currently engaged in the process to seek OMB approval of a 
PEWD application form under the Paperwork Reduction Act of 1995. Upon 
approval of this form, providers and suppliers should complete the form 
and submit it, with all required documentation, to the designated 
mailbox: [email protected]. Upon receipt of the 
application, required documentation, and payment of the application 
fee, CPI will review for completeness and, within 30 days, will respond 
with confirmation of receipt or in the case of an incomplete 
application, rejection. Application submission will require full 
disclosure of affiliations as outlined in the March 1, 2016 proposed 
rule (81 FR 10720) titled ``Medicare, Medicaid, and Children's Health 
Insurance Programs; Program Integrity Enhancements to the Provider 
Enrollment Process'' (hereinafter referred to as the March 1, 2016 
proposed rule). Although this is a proposed rule, we are adopting the 
proposed procedures for disclosing affiliations for purposes of this 
demonstration. Should we receive more than one application for a 
particular geographical area, the applications will be prioritized by 
order of receipt. An application will not be considered received until 
it is complete, including fingerprints. A more detailed discussion 
regarding these requirements may be found later in this section of this 
document. Subsequently, CMS will have 90 days from initial receipt to 
review each application and communicate a decision to the provider or 
supplier.
    Once a complete application is received, the primary determining 
factor for PEW approval under this demonstration, and the first step in 
application review, will be a determination regarding beneficiary 
access to care. This determination will be primarily based upon an 
evaluation of provider and supplier saturation, provider or supplier to 
beneficiary ratios, and claims data; this review will be supplemented 
with the access to care information that the provider or supplier has 
provided. As a requirement of the application, the provider or supplier 
will be required to submit detailed access to care information that 
demonstrates whether an access to care issue exists in the counties 
where the provider or supplier is attempting to enroll. In 2016, we 
publicly released moratoria-related saturation data. This data set, 
located at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-
sheets/

[[Page 51118]]

2016-Fact-sheets-items/2016-02-22.html, includes national and state, 
and county level, saturation data that identifies states that are 
currently impacted by moratorium. This data gives both states and the 
public detailed information relevant for an access to care 
justification. Additionally, we expect applicants to submit data to 
support that an access to care issue exists, which should not subject 
applicants to unnecessary burdens of performing extensive analyses. CMS 
will evaluate the provider- or supplier-generated information and 
compare it with statistical analysis data that is generated internally 
by CMS to determine whether an access to care issue exists in the 
identified area.
    If we determine that a beneficiary access to care issue does not 
exist in the counties where the provider or supplier proposes to 
operate, the application will be rejected and the application fee will 
be refunded. A provider or supplier whose application has been rejected 
may submit a new application at any time. If any subsequent application 
demonstrates an access to care issue, then we may move forward with 
processing the application.
    When we determine that beneficiary access to care is limited in the 
counties where the provider or supplier has proposed to enroll, we will 
continue to the next step in processing the application. We will 
utilize the ownership information in the submitted CMS-855, in 
conjunction with the information on the PEWD application, to perform 
the following screening measures:
     License verification.
     Background investigations including evaluation of 
affiliations as outlined in the March 1, 2016 proposed rule.
     Federal debt review.
     Credit history review.
     Fingerprint-based criminal background checks (FCBC) of 
persons with a 5 percent or greater direct or indirect ownership 
interest, partners and managing employees.
     Enhanced site visits.
     Ownership interest verification in LexisNexis and state 
databases.
     Evaluation of past behavior in other public programs.

Providers and suppliers who do not pass these heightened screening 
requirements will receive a letter stating that their application has 
been denied and indicating the specific reason(s) for denial. Should it 
choose to do so, a provider or supplier whose application has been 
denied may submit an appeal to CMS within 15 days of denial. The appeal 
must specifically address the reason(s) for denial and detail the 
action(s) taken to resolve any deficiency. We will evaluate the appeal 
and process, or deny, the application as appropriate. If a provider or 
supplier's application is denied because the provider or supplier has 
not passed the heightened screening requirements, the application fee 
will not be refunded. Further, if a provider or supplier is denied for 
a reason under Sec.  424.530(a), the provider or supplier may not 
reapply under the Provider Enrollment Waiver (PEW). Additional 
information about submitting an appeal may be found on the provider 
enrollment moratoria Web site at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/ProviderEnrollmentMoratorium.html.
    If CMS determines that a provider or supplier meets the 
requirements of the PEWD, it will forward the provider or supplier's 
CMS 855 application to the Medicare Administrative Contractor (MAC) for 
further processing. The MAC will process the application and determine 
whether enrollment is appropriate based on all current enrollment 
policies and procedures.
    In addition to the heightened screening measures previously 
described, providers or suppliers that enroll via this demonstration 
will also be subject to a 1-year period of enhanced oversight as 
authorized by section 1866(j)(3)(A) of the Social Security Act (the 
Act). As part of this oversight, providers or suppliers that enroll 
through the demonstration will be limited to furnishing services within 
a specific geographic area based on beneficiary access to care 
determinations. Providers and suppliers submitting a PEWD application 
will specify a requested geographic area. However, this area may be 
further restricted or expanded based upon CMS's determination regarding 
the scope of the access to care issue. Claims for services furnished 
outside of the approved service area will be denied and the provider or 
supplier may not bill beneficiaries for services outside of the 
approved service area.
    Another aspect of our enhanced oversight during this demonstration 
will be to closely monitor the billing patterns of providers and 
suppliers through the Fraud Prevention System (FPS). Any abuse of 
billing privileges may result in revocation of Medicare enrollment. All 
applicants who are enrolled through the PEWD will be subject to all 
Medicare policies and regulations, including the requirement of 
revalidation of their Medicare enrollment within five years of initial 
enrollment, in addition to the heightened oversight that is implemented 
through the demonstration.
    If CMS determines there is a beneficiary access to care issue, we 
will utilize tools that CMS already has in place to facilitate care. 
Both the regional offices and 1-800-MEDICARE have experience and 
valuable tools in resolving beneficiary access to care issues, 
including Home Health Compare and similar provider and supplier locator 
resources. As current practice dictates, the beneficiary will also be 
assisted with widening his search, if appropriate, and can be given 
additional means to assist in finding care, including utilizing the 
Senior Health Insurance Program (SHIP), an organization that is very 
experienced in addressing such issues. In the event that the 
beneficiary is a Medicare Advantage enrollee, then their plan would be 
contacted and responsible for providing a resolution to their access to 
care issue.

B. Increased Investigation and Prosecution

    Throughout the course of the demonstration, CMS will work with all 
of its state, federal and law enforcement partners to identify 
fraudulent providers and suppliers and will take administrative action 
to remove such providers and suppliers from the Medicare program. For 
example, within 60 days of a provider or supplier's enrollment pursuant 
to the PEW, we will perform proactive monitoring and oversight of such 
provider or supplier, including proactive examination of claims data 
and investigation of billing anomalies. Further, we will prioritize 
PEWD-related investigations and will make referrals to appropriate law 
enforcement partners, including Department of Justice (DOJ), Office of 
Inspector General (OIG), and state law enforcement agencies, for 
prosecution of fraud.

C. Medicaid and CHIP Implementation

    In addition to the Medicare program, this demonstration will also 
apply to Medicaid and CHIP. The states will administer the Medicaid and 
CHIP PEWD and will independently evaluate access to care. If a state 
determines that a statewide expansion of temporary moratoria would pose 
unique access to care concerns as compared with more geographically 
limited moratoria, then the state may elect to lift the moratoria after 
notifying the Secretary. However, we anticipate that, in the majority 
of cases, states will be able to use the flexibilities afforded by PEWD 
to address access to care concerns.

[[Page 51119]]

    All PEWD-related processes, including but not limited to heightened 
screening, enrollment, denials, and appeals will be operationalized by 
the state Medicaid and CHIP agencies in accordance with Federal and 
State regulations and guidance. The states will make recommendations to 
CMS regarding when a provider should be enrolled based on access to 
care, and must wait for CMS concurrence prior to enrolling a provider 
under the PEWD. CMS will evaluate all recommendations within 30 days of 
receipt and will advise the state as to whether or not CMS concurs with 
the recommendation to move forward in the enrollment process. States 
will not be required to seek approval from CMS to deny a PEWD 
application. If a provider or supplier receives an enrollment waiver 
from Medicare, the provider or supplier will be eligible to enroll in 
Medicaid or CHIP without further review by the states or further 
concurrence by CMS. However, if a provider or supplier receives a 
Medicaid or CHIP waiver, the provider or supplier must separately apply 
for a waiver with Medicare.

D. Demonstration Conclusion

    CMS will utilize the PEWD as an opportunity to observe the 
statewide moratoria and heightened application review effectiveness 
until the moratoria are lifted, or for a total of 3 years, whichever 
comes first. Should the PEWD prove to be a useful tool, we will explore 
options for continuing and expanding the most successful aspects 
outside of the context of a demonstration. The enhanced oversight 
exercised as part of the demonstration will also allow us to identify 
trends and vulnerabilities in the moratoria states and make program 
adjustments to address fraud schemes as they transform over time.
    At the conclusion of the demonstration, those enrollments that 
occurred as part of the PEWD will be converted to standard enrollments 
without geographical billing restrictions.

E. Duration of the Demonstration

    The PEWD will begin concurrently with statewide expansion of 
moratoria of HHAs and ambulance suppliers in 6 states (which will be in 
place for 6 months with the potential for extensions in 6-month 
increments) and will commence on July 29, 2016. This demonstration will 
last until the statewide moratoria are lifted, or for a total of 3 
years through (concluding on July 28, 2019), whichever comes first.

IV. Collection of Information Requirements

A. Background

    In accordance with the implementing regulations of the Paperwork 
Reduction Act of 1995 (PRA) we requested emergency review under 5 CFR 
1320.13(a)(2)(i) because public harm is reasonably likely to result if 
the regular clearance procedures were followed. Interested parties may 
comment on the collection of information requirements during a 2-week 
comment period beginning on July 29, 2016. Those comments will be 
reviewed prior to OMB action. Once approved, any information collection 
will be active for no more than 6 months.
    Section 3506(c)(2)(A) of the PRA requires federal agencies to 
publish a 60-day and 30-day notice in the Federal Register concerning 
each proposed collection of information requirements. To comply with 
the PRA, CMS will publish the 60-day Federal Register notice 
immediately following OMB approval of the emergency information 
collection requirement (ICR).
    To fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the PRA requires that we 
solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on the ICRs outlined as follows.

B. Burden Estimate (Hours and Wages)

1. Paperwork Burden Estimate (Hours)
    The provider and supplier burden associated with completion of this 
form is estimated at six hours per form. This will include the 
following time burden per form:

 2 hours for completion of fingerprint-based criminal 
background check (FCBC)
 2 hours for completion of access to care assessment
 1.5 hours for completion of form
 0.5 hours for completion of other miscellaneous administrative 
activities

    There will be variation to this estimate based on proximity to a 
fingerprinting offices as well as the complexity of the data that the 
provider or suppliers elects to submit. To assist with completion of 
access to care assessment, CMS has HHA and ambulance saturation data 
available at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-02-22.html.
    CMS expects an estimate of 800 new applicants \1\ requesting waiver 
for a total of 4,800 burden hours annually. Additionally, the provider 
will have the additional burden associated with completion of the CMS-
855, which is required for enrollment into Medicare. This burden is 
covered under OMB control number 0938-0685.
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    \1\ 800 applicants is an estimate based upon the number of new 
enrollments plus the number of denials due to moratoria in all 
moratoria states.
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2. Paperwork Burden Estimate (cost)
    This form will be completed by provider and suppliers seeking a 
waiver to enroll in a Moratoria area. The cost burden is estimated at 
$26.00 ($13.00 base pay) an hour for completion of access to care 
analysis and miscellaneous administrative activities, totaling $65.00 
per application, equaling $52,000 annually. The cost burden is 
estimated at $178.70 ($89.35 base pay) an hour for the owner to obtain 
fingerprints and waiver form totaling $625.45 per application, equaling 
$500,360 annually. Estimated annual burden for 800 newly enrolling 
applicants totals $552,360.To derive average costs, we used date from 
the Bureau of Labor Statistics' May 2015 National Occupational 
Employment and Wage Estimates (http://www.bls.gov/oes/current/oes_nat.htm#31-0000 for healthcare support occupations and http://www.bls.gov/oes/current/oes111011.htm for chief executives.) Hourly 
wage rates include the costs of fringe benefits (calculated at 100 
percent of salary) and the adjusted hourly wage.

C. Response to Comments

    We welcome comments on all burden estimates contained in the 
collection of information section of this notice. If you comment on 
these information collection and recordkeeping requirements, please do 
either of the following:
    1. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
(CMS-10629), Fax: (202) 395-6974; or Email: 
[email protected].

V. Waiver Authority

    Under section 402(b) of Pub. L. 90-248 (42 U.S.C. 1395b-1(b)), 
certain

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requirements of the Act and implementing regulations will be waived in 
order to implement this demonstration. Specifically, CMS will waive the 
following authorities in Florida, Illinois, Michigan, New Jersey, 
Pennsylvania, and Texas:
     Waiver of Sec.  424.518(c) and (d) and 455.434(a) which 
describe the fingerprinting rules for enrollment in Medicare, Medicaid 
and CHIP.\2\ This waiver involves expanding the existing regulatory 
authority in two ways: (1) To include ambulance suppliers requesting a 
PEW waiver within the categories of providers and suppliers to which 
the FCBC requirements apply; and (2) to include managing employees 
within the associated individuals subject to an FCBC when the provider 
or supplier seeks to enroll according to the PEW. Additionally, we 
intend to modify the authority which currently requires denial or 
revocation of providers or suppliers who fail to submit fingerprints, 
to instead specify that a PEWD application will be rejected if the 
provider or supplier fails to submit the required fingerprints within 
30 days.
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    \2\ According to Sec.  457.990, the enrollment screening 
requirements applicable to providers enrolling in Medicaid apply 
equally to those enrolling in CHIP.
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     Waiver of section 1866(j)(3)(B) of the Act, which requires 
program instruction or regulatory interpretation in order to implement 
section 1866(j)(3) of the Act for the provisional period of enhanced 
oversight for new providers of services and suppliers. We intend to 
implement the requirements of section 1866(j)(3) of the Act for 
purposes of this demonstration and in the absence of regulation or 
other instruction in order to allow for a 1-year period of enhanced 
oversight of newly enrolling providers and suppliers under this 
demonstration.
     Waiver of Sec.  424.545, Part 498 Subparts D and E, and 
Sec.  405.803(b) of the regulations, as well as section 1866(j)(8) of 
the Act which allow a provider or supplier the right to request a 
hearing with an administrative law judge and the Department Appeals 
Board in the case of denial of an enrollment application. Denials of 
enrollment pursuant to this demonstration will be appealable only to 
CMS, and any applicant to the PEWD will waive their right to further 
appeal.
     Waiver of section 1866(j)(7) of the Act and Sec. Sec.  
424.570 and 455.470 of the regulations which specify that the moratoria 
must be implemented at a provider- or supplier-type level, in order to 
allow a case-by-case exception process to moratoria.

    Dated: July 26, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2016-18381 Filed 7-29-16; 4:15 pm]
 BILLING CODE 4120-01-P